Ever wondered how the average laundromat, with its steady hum of washers and dryers, can generate enough revenue to spin profits on rinse and repeat? Think of it like this. In 2024 alone, the global laundromat industry is projected to hit a whopping $204.6 billion.
If you keep the laundromat clean, the machines in good order, and offer good customer service, chances are you'll see between 20-35% ROI (return on investment).
The future of laundromats in 2024 and beyond is characterized by a blend of technology, sustainability, and enhanced customer service. As these trends continue to develop, self-service laundromats will not only become more efficient but also play a vital role in community building and environmental conservation.
Understanding laundromat value
U.S. Laundromats post impressive numbers with a 95% average success rate and 20 - 35% profit margins. But whether or not your laundromat can meet (or exceed) these industry standards depends on some important factors.
Answer: Monthly profits can vary widely based on the location, size, and operational efficiency of the laundromat. On average, smaller laundromats might earn between $1,500 to $5,000 in profit per month, while larger, well-established ones in prime locations might see profits of $10,000 to $30,000 or more per month.
According to Dave Menz, the average laundromat makes around $300K in revenue per year. Depending on the location, competition, number of machines, and additional services, a laundromat business may make more or less than this estimate.
Neglecting or mismanaging your business
Bad management is the top reason why many laundromats eventually fail. All too often, a person will purchase a laundromat with the idea that as long as they collect their earnings every week or two, the business will continue running.
We talked to the Laundromat Millionaire, Dave Menz, who owns four laundromats and makes nearly $2 million annually. He even helps other business owners navigate the industry to get more customers, become a full-service laundromat, and outshine absentee owners.
With many modern housing structures equipped with in-unit washers and dryers, the need to go a neighborhood laundromat is diminishing. But business owners can still attract customers if they provide reasons for people to spend money in their stores. That is not to say the business has been completely eliminated.
Laundromats are actually quite recession-resistant. Unlike other businesses, people still need to wash their clothes even when money is tight.
Opening a laundromat is a relatively low-risk investment, with many studies putting the success rate for laundromats at nearly 95 percent. It's clear that opening a laundromat can be very profitable. In fact, U. S. laundromats experience an average cash-on-cash ROI of 20 to 35 percent.
Entrepreneurs normally spend between $100K and $1 million to start a new laundromat or buy a laundry business for sale. Dave suggests that you should normally spend between two and five times revenue, but that you should base your business valuation on what it's worth to you.
Location – Many laundromats suffer from “inferior location complex”. Laundromats located in a defunct plaza can suffer when the plaza has gone south, lack of upkeep to the plaza, poor parking, limited visibility, bad neighbors (neighboring businesses that attract the wrong crowd, fail to attract business, etc.)
How to Best Operate a Laundromat. Running a Laundromat is simple, but creating or maintaining a successful laundromat takes hard work. An owner does not need to be in the laundromat every day, but they must understand their customers, equipment and competition.
In 2024 alone, the global laundromat industry is projected to hit a whopping $204.6 billion. That's enough money to buy every man, woman, and child in the United States a brand new washing machine and dryer, with some change to spare. But profits don't launder themselves.
While not legally required, there's a compelling case for starting your laundromat as a limited liability company (LLC).
Starting a new laundromat costs between $200,000 and $500,000, and you can expect to pay between $100,000 and $400,000 to buy an existing one. Since most people don't have that kind of cash laying around, you'll need to come up with funding to cover the costs.
While owning a laundromat can provide passive income, it's not completely passive. It requires an initial investment, ongoing maintenance, and management to ensure that the machines are well-maintained, the store is clean and safe, and customers are satisfied.